India, Oman to give push to talks for free trade deal

India and Oman agreed on Saturday to give a push to negotiations to finalise a free trade agreement even as the two sides adopted a vision document to shape ties in the coming decades during talks between Prime Minister Narendra Modi and Sultan Haitham bin Tarik.

The two sides announced the third tranche of $300 million (about ₹2,500 crore) for the Oman-India Joint Investment Fund, a 50-50 joint venture between the State Bank of India and the Oman Investment Authority created to channel funds into the fastest growing sectors of India’s economy.

Sultan Haitham is on his first visit to India since becoming Oman’s head of state in 2020 following the death of Sultan Qaboos bin Said. This is also the first visit by an Omani ruler to India in 26 years. Sultan Haitham held one-on-one and delegation-level talks with Modi after being accorded a ceremonial welcome at the presidential palace.

The proposed comprehensive economic partnership agreement (CEPA) or free trade deal figured very prominently in discussions between the two leaders, foreign secretary Vinay Kwatra told a media briefing. “Although the negotiations on CEPA have started only recently, they have made substantial progress in the last few rounds of discussions and both leaders gave strong impetus and push to conclude the CEPA as early as possible,” he said.

The negotiations were fast-tracked after a formal meeting on the trade deal on November 20. The two sides have agreed on most of the text for the agreement at the first round of talks in New Delhi during November 27-29 and the second round in Muscat during December 9-11, people familiar with the matter said.

Sultan Haitham and Modi adopted the “India-Oman Joint Vision: Partnership for future”, which envisages the pathway for bilateral engagement in the coming decades and is based on the Oman Vision 2040, a national development blueprint, and India’s development vision till 2047.

The vision document focuses on some 10 areas, including maritime cooperation and connectivity, energy security and green energy, cooperation in space, digital payments and fintech, partnership in health, tourism and hospitality, disaster management, agriculture and food security, and using cricket to bolster people-to-people ties.

In the context of trade and investment cooperation, the two sides announced the third tranche of $300 million for the Oman-India Joint Investment Fund to invest in the fastest growing segments of the Indian economy. The first tranche was valued at $100 million, and the second at about $200 million. Kwatra said this funding reflects the desire of the two countries to forge a “very strong base of economic ties through direct capital investments in the growing sectors of the Indian economy”.

With two-way trade having more than doubled from $5.4 billion in 2020-21 to $12.39 billion in 2022-23, Kwatra said the two countries were looking at the possibility of linking India’s Unified Payment Interface (UPI) system with its Omani counterpart and trade settlement in local currencies.

The challenges created by the Israel-Hamas conflict also figured in discussions between Modi and Sultan Haitham on regional and international issues. Kwatra said multiple challenges thrown up by the conflict in Gaza were an “important element of the discussions”, and there was a shared appreciation of the challenges that both sides face due to the conflict and “catastrophic humanitarian situation”.

The two sides also exchanged perspectives on the challenge of terrorism and the need for a two-state solution as a way forward, he said.

India and Oman also inked agreements on cooperation in combating financial crimes, information technology, and culture, and on establishing a Hindi chair of the Indian Council for Cultural Relations (ICCR) in Oman. The agreement on tackling financial crimes envisages exchange of information between India’s financial intelligence unit and Oman’s National Centre for Financial Information to prevent money laundering and terror financing, Kwatra said.

India and Oman, Kwatra said, are partners for maritime security in the western Indian Ocean and both sides have robust defence engagement. Maritime cooperation between the two sides is extensive and Oman’s Duqm port can serve as a logistical base for joint efforts for humanitarian assistance and disaster relief, he said.

Kwatra also highlighted the role of the Indian community of 7,00,000 in Oman, especially their significant contributions to the development of the West Asian country’s economy.